Teekay Tankers Ltd. · NYSE:TNK
Teekay Tankers — Q3 2010 Earnings Presentation
11 slides from Teekay Tankers's earnings presentation, Nov 5, 2010
Slide 1: Q3 2010 Earnings Presentation
Q3 2010 Earnings Presentation November 5, 2010
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding: tanker market fundamentals,
Slide 3: Recent Highlights
Recent Highlights » Declared a dividend of $0.31 per share for Q3 x Payable on November 30th to all shareholders of record on November 16th » 2/3 of Q3 days were covered by fixed time-charters at an avg. of ~$26,000 per day; remaining 1/3 of days were booked in the spot market at an avg. of ~$16,500
Slide 4: Details of Accretive Ship Acquisition Transactions
Details offrom Highlights ShipAccretive Acquisition Transactions » Teekay Tankers has agreed to acquire one Aframax and one Suezmax for $107.5 million Ship Name Built Type Charter Charter Time-charter Type Expiry rate Esther Spirit* 2004 Aframax T/C July 2012 $18,200 Iskmati Spirit 2003 Suezmax Spot
Slide 5: TNK's Financial Position Strengthened
TNK’s Financial Position Strengthened » Total liquidity to increase to ~$213m (pro forma for this transaction) x Esther Spirit offered with $42.5 million undrawn revolver priced at LIBOR +0.6% x Iskmati Spirit offered with $58 million undrawn revolver priced at LIBOR +0.6% » No impact on TNK’s favor
Slide 6: New Investments/Charters Will Add to Already Balanced Portfolio
New Investments/Charters Will Add to Already Balanced Portfolio Name Y/ Built Dwt Kaveri Spirit 2005 149,985 Ashkini Spirit 2003 165,200 Trading in Pro Forma Coverage Kanata Spirit 1999 113,000 Teekay Pools (by Revenue Days) Iskmati Spirit 2003 165,209 Fixed Spot Helga Spirit 2005 115,515 $28,750 Q4
Slide 7: TNK's Next 12 month Illustrative Dividend
TNK’s Next 12 month Illustrative Dividend » Fixed rate revenues more than cover all costs and reserves for the next 12 months, with an additional $0.30 per share available for payout as dividends » In addition, all revenues from spot fleet available to be paid out to shareholders ($ in millions, exc
Slide 8: Maintaining Operating Leverage
Maintaining Operating Leverage » Every $5,000 per day increase in spot TCE provides an additional $0.27 per share to annual dividend Illustrative Run-rate Dividend – Next 12 Months Yield* 24% $3.00 20% $2.50 Annual Dividend 16% $2.00 12% $1.50 8% $1.00 4% $0.50 $- Suezmax Rates 15,000 20,000 25,000
Slide 9: Q4 2010 Dividend Matrix
Q4 2010 Dividend Matrix » Tanker rates currently below those experienced in Q3 » TNK largely insulated with ~70% fixed coverage for Q4 » Estimated Q4 2010 dividend positively impacted by recent investments Q4 Estimated Dividend Suezmax Spot Rate Assumption (TCE per day) Per Share * $10,000 $15,000 $
Slide 10: Factors for a Winter Market Recovery
Factors for a Winter Market Recovery Previous Winter Market Spikes Seasonal Factors Which Can Tighten The Market Onset of winter heating demand in the 80 Æ Average Aframax Rates Sep-Feb 70 2007 2008 2009 2010 ytd northern hemisphere 60 USD ‘000 / day Æ 50 Return of refineries from autumn maintenance
Slide 11: See-saw Battle Between Tanker Supply and Demand
See-saw Battle Between Tanker Supply and Demand % Tanker Fleet Growth Challenging year? Market Softening 8% Tight market % Tanker Demand Growth Potential turning 6% point? 4% 2% 0% -2% Source: Platou, company estimates -4% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E » Projected fleet gr